Picasso auction reveals Vegas shift from gambling to ‘experience’

When Steve Wynn opened the Bellagio resort on the Las Vegas strip in 1998, it marked a dramatic departure from the casino formula that had worked for decades in Sin City.

The Italian-themed resort featured upmarket restaurants, luxury retail and other diversions that offered patrons opportunities to spend large sums of money on activities that did not involve gambling. The Bellagio also became a showcase for Wynn’s art collection, including his Picassos, 22 of which have been displayed for more than 20 years in a restaurant called — what else? — Picasso.

On Saturday, MGM Resorts — which bought the Picassos as part of its $ acquisition of Wynn’s Mirage in 2000 — sold 11 of the works at an unusual Sotheby’s auction in Las Vegas for a total of $109m. The remaining Picassos will remain on display at the casino.

Homme et Enfant, a late Picasso work from 1969, sold for $24.4m. © Getty Images

The sale might have been seen as a way for MGM to begin scrubbing itself of Wynn’s legacy following accusations in 2018 of sexual misconduct. Wynn was forced to step down from his company, Wynn Resorts, following the allegations, and a new chief executive was installed. Wynn has called the claims “preposterous”.

But in fact the auction — the centrepiece of which was the sale of Femme au Béret Rouge-Orange, a 1938 portrait of Picasso’s muse Marie-Thérèse Walter, for $40.5m — reflects just how embedded the Wynn model is in today’s casino and resort industry.

Wynn created an air of luxury by scattering sculptures, paintings and other artwork in his casinos alongside high-end retailers such as Hermès. His room rates were high and restaurants offered expensive food cooked by celebrity chefs such as Wolfgang Puck — this in a city that had been known for using midnight buffets and cheap rooms to attract gamblers.

The Bellagio still hews to this basic formula after 20-plus years under MGM Resorts, with its fine-art gallery a short walk away from the baccarat tables and video blackjack machines.

When it opened in 1998, the Bellagio resort marked a departure from the Las Vegas strip’s focus on gaming, introducing art and better restaurants © Bloomberg

MGM Resorts is no longer primarily a gaming company, with about 70 per cent of its revenue coming from non-gaming activities. Instead the company considers itself to be in the “experiential business,” and art is a part of that, says Ari Kastrati, chief hospitality officer for MGM Resorts, noting that the company’s portfolio of artworks stands at about 900.

“The art budget is part of the entire experience budget,” Kastrati says. “When we commit to designing something new, art is at the epicentre of that decision.”

He pointed to the MGM National Harbor, opened in 2016, which has the largest public art collection in the Washington DC area outside of a museum. Much of that art is by African-American artists, a reflection of the large black community in the area.

This trend toward diversity in its art portfolio will continue, MGM says. A portion of the proceeds from the Picasso auction will be spent on buying new art by under-represented artists, Kastrati said, including by women, people of colour and members of the LGBTQ community.

Auctioneer Oliver Barker calls bids as 11 Picasso paintings and works are auctioned at the Bellagio Hotel in Las Vegas on Saturday night © REUTERS

Bill Hornbuckle, MGM Resorts’ chief executive, worked for Wynn at the Golden Nugget casino and on the opening of his Mirage hotel in 1989. Though experiences are important, he is not finished with gaming. The company is pushing further into the booming US online gambling and sports betting market, which is becoming more important as the casino customer demographic ages. One focus has been on building its BetMGM platform, the second-largest online sports betting operator in the US.

Saturday’s white-glove auction, which drew an audience that included the actor Leonardo di Caprio, marked the first time Sotheby’s had staged an evening sale in North America outside of New York. It was also the most significant fine-art sale to take place in Las Vegas, with Sotheby’s chair Oliver Barker acting as auctioneer.

The other big sale of the night was Homme et Enfant, a nearly two-metre high late-period Picasso from 1969. It sold for $24.4m.

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